John Kitzhaber: Chris Dudley's "jobs plan" won't create jobs (video)
Kari Chisholm
In a video released yesterday, John Kitzhaber responded clearly and directly to the so-called "jobs plan" released this week by Chris Dudley. In short, the plan is the usual cut-taxes-and-pray-for-jobs nonsense we hear from Republicans all the time.
Not only that, but Dudley actually tried to claim that his tax cuts would pay for themselves - by use of David Stockman's magic asterisk, an approach to budgeting that even David Stockman has renounced. (Stockman was Reagan's first budget director, who used his asterisk to claim that tax cuts would cause actually cause revenues to rise.)
Meanwhile, Kitzhaber's plan for Oregon jobs would actually start putting people to work right away.
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1:22 p.m.
Sep 17, '10
[Full disclosure: My firm built John Kitzhaber's campaign website. I speak only for myself.]
5:37 a.m.
Sep 19, '10
"who used his asterisk to claim that tax cuts would cause actually cause revenues to rise."
wow actually tax cuts would actually cause tax revenues to rise?
Hello earth to Kari thats exactly what happened under Reagan ...check your facts you can still hate Reagan after you get them corrected but tax revenues rose significantly after Reagan cut taxes ...sorry
11:30 a.m.
Sep 19, '10
Sorry, but your "facts" are not facts.
Total Federal revenue in constant dollars (billions)
1981 1,251.4 < Reagan tax cuts passed
1982 1,202.8 < drop
1983 1,113.6 < drop
1984 1,174.3
1985 1,250.9 < drop
1986 1,277.7
1987 1,375.7
1988 1,421.1
Source: CBO historical data
12:20 p.m.
Sep 19, '10
Not sure why that third "drop" was there. I must have inadvertently hit paste will putting in the line breaks and didn't catch it while formatting the post.
Mea culpa.
12:47 p.m.
Sep 19, '10
Yeah, Reagan initially succeeded in slashing tax rates but had to back track cause it was too much.
Flip flopper!
1:26 p.m.
Sep 17, '10
Kitzhaber is right to criticize. He was such an amazing success before, I don't understand why we aren't actively working to impeach Gov. Kulo now so we can get Kitz back in there ASAP! =\
5:39 a.m.
Sep 19, '10
Kitz was NOT succesful doing anything but sending business and jobs straight out of Oregon... check your facts Olaf he governed during a very robust time and created very few jobs and I believe if you look at both terms we experienced a net job loss! Don't know how you are measuring success but if it is like the rest of us ...he was NOT a good governor
11:33 a.m.
Sep 19, '10
Except jobs were not driven out of Oregon. Under Kitzhaber we experienced great job growth with a downturn when the .com bubble burst. This despite having to veto a slash-and-burn GOP controlled legislature's budgets five times.
1:39 p.m.
Sep 17, '10
Kari, it's right and appropriate to add your disclaimer to these posts. Dudley needs to take a lesson from you and disclose that under his 20 point plan, his company Filigree Advisors stands to make MILLIONS with his proposed change to the capital gains tax. It's creating wealth, only applies to millionaires, and doesn't promise to create a single job. This is really bothering me. He's setting it up to give himself a pretty nice kickback and no one else is noticing yet.
1:59 p.m.
Sep 17, '10
How do you figure the COMPANY stands to make money. They are wealth advisors. Their clients will benefit, as will EVERYONE in Oregon who owns stocks and sells them.
2:09 p.m.
Sep 17, '10
This is not a serious question, is it Michael?
2:53 p.m.
Sep 17, '10
Trolls can be serious, too.
3:11 p.m.
Sep 17, '10
So what am I when you agree with me, which happens about 90% of the time here.
2:13 p.m.
Sep 17, '10
It's interesting that you acknowledge that anyone who owns or sells stocks will make money, but no mention of jobs created.
I own a small business. We don't make hiring decisions based on capital gains tax. We make hiring decisions based on demand. Dudley is unhappy with the current system which (GOD FORBID) taxes his money made speculating at the same rate as income. His plan means that a day trader pays 66% LESS tax than a cop or a firefighter. And he says this is paid for by the jobs that it will create. WHERE HAVE I HEARD THAT BEFORE???
I take back what I said. Dudley DOES know what he's doing. He's making himself and his buddies rich with money that belongs in Oregon's coffers for vital services.
2:21 p.m.
Sep 17, '10
Investors in startups and small business, you know, the entities that are the largest driver of job growth in the country, DO care about Oregon's obscenely high capital gains tax.
Source: Oregon Council for Knowledge and Economic Development
2:34 p.m.
Sep 17, '10
Bah! Think-tankery (and tonics)
Bush cut the national cap gains tax by 40%.
Where are the effing jobs?
Srsly. The tax cuts are still in place now. Where are the effing jobs?
The above statement you posted can apply to any state. Oregon does not exist in a vacuum. We're on track to gain jobs regardless of which guy is sitting in Salem. Dudley knows this. He's seeing dollar signs. And he will get them.
2:48 p.m.
Sep 17, '10
I left out one detail about OCKED. I wanted you to trash it first b/c it didn't say what you wanted to hear.
January 28, 2001 Governor John Kitzhaber today appointed 10 state educational and industry leaders to serve as the first members of the new Oregon Council for Knowledge and Economic Development (OCKED).
2:52 p.m.
Sep 17, '10
Yeah. And then sadly later that year 4,000 Americans died in a foreign attack on this country and we were already well into a national recession.
I wasn't bashing OCKED. I'm just saying, projections and theories don't apply to REAL situations in Oregon.
So, no refutations Michael?
2:52 p.m.
Sep 17, '10
Wups!
In the above, I meant to say "worst DOMESTIC attack".
3:09 p.m.
Sep 17, '10
Per BLS: job growth 4 years prior to tax cut 2%, 4 years after cut 5%
Per CBO: Capital gains tax revenue doubled in 4 years post cut
Per Bureau of Economic Analysis: Investment in private fixed assets,equipment, software and structures up 23% for 3 years after vs. 3 years prior
3:26 p.m.
Sep 17, '10
could you please attach a link please.
3:36 p.m.
Sep 17, '10
bls.gov -- you have to do the math
http://www.ncpa.org/pub/st307?pg=6 figure 1 & 2 -- you have to do the math
3:56 p.m.
Sep 17, '10
like I said that is from prior to meltdown.
that said, given the actual jobs stats under Bush are you claiming that things were so screwed under Bush that the cap gains tax kept it from getting worse?
Bush cap gains cuts occurred in May 2003. at the same time we were coming out of 9/11 recession, If you are claiming that the cap gains taxes are responsible for that what is your cause/relationship argument as opposed to us simply coming out of a recession?
Further I could use similar logic to claim that we had economic meltdown, in part, due to tax cuts.
There is a huge difference between creating wealth and creating jobs as simply illustrated by the current gap between rich and poor.
1:06 p.m.
Sep 18, '10
You'll find I rarely make any claims about anything at all. What I said was the data showed that job growth, revenue from capital gains and private investment all increased significantly after the capital gain rate was cut.
Btw, don't assume that just b/c I am reporting this data that I support Bush. I frankly would like to see Bush et. al tried in the Hague for war crimes.
4:04 p.m.
Sep 17, '10
just curious. Under Dudley's plan a teacher, police officer, janitor, or anyone that works for a living... would be paying 66% higher rate on their income than speculators, and day traders.
do you support that? How does that create jobs here?
4:54 p.m.
Sep 17, '10
Correct me if I am wrong, but aren't short term capital gains, the kind generated by day traders, taxed at their income tax rate?
It would only be long term gains that would be reduced.
7:37 p.m.
Sep 17, '10
I have not heard him make that distinction. Nor do I see that in his plan.
http://www.chrisdudley.com/issues/plan-to-create-private-sector-jobs.html
scroll to the bottom of page 8 and tell me if I missed it.
1:09 p.m.
Sep 18, '10
His comment about making OR competitive with surrounding states infers long term cap gains. I am not aware of any state that doesn't tax sh term cap gains at income tax rate (those that tax income)
7:51 p.m.
Sep 17, '10
btw: I would add to this discussion that as a business owner (our business, we're an S corp, is about the same size as Dudley's), our tax rates have never been lower.
we're actually in a pretty comfortable position because
1.) we're a B2B business 2.) in early 2008 we saw this coming and lined up a ton of credit. That credit is helping us maintain a great relationship with our vendors.
Many small businesses aren't so lucky.
Our accountant (who's a GOP'er, with whom enjoy debating whenever we see him), advised us to stash money. Not due to the economy, because our demand is pretty decent, but due to our ability to remove cash from the business cheaper than we've ever been able to before. This money isn't creating jobs... demand is.
I will not deny that "some" jobs can be created by a cap gains cut. But I simply don't buy that it is a key source of the problem. Nor do I believe based on every bit of historical data that I have seen that it will even come close to creating the number of jobs Dud says it will.
If Dud wins here is my prediction... Our jobs situtation will improve, but not as a result of tax cuts or anything Dud did but as a result of a nation in recovery. But I also see huge deficits because Dudley will immediately work to cut revenue and sht down the OLCC, give scholarships and then suddenly find himself being told "errr... chris, our job creation projections are falling far short, we have no money"
my 2¢
1:15 p.m.
Sep 18, '10
Btw, I have been a small business owner since 1993.
I have heard and read, from a wide variety of experts, that our capital gains tax rate, not our business tax rate, is a huge factor in not attracting capital investment.
I just wish that BO spent as much time digging into Kitzhabers plans as they do into Dudleys. I suspect both plans are filled with wildly optimistic projections. my 2¢
Thanks for engaging in a rational discussion of this topic. We can disagree, but we don't have to be disagreeable.
5:06 p.m.
Sep 18, '10
Michael, again attracting capital is not the major problem driving unemployment at the moment. It is lack of demand.
2:42 p.m.
Sep 19, '10
But we never want to be in a situation where we are driving capital away do we? Also less taxes means more money for people to spend as well as lower costs. Also most taxes on companies wind up being paid for by consumers anyway. Even 66 and 67 will ultimately be paid for by consumers by increased prices. Normally in a business model if you are buying products lets say at $4 each and you sell at $8.00 if you suddenly have a .25 cent tax on your $4 product you will increase that cost to the consumer by .50 cents to keep your margin. On the other side cutting taxes to businesses will take a few years to recover the income by economic growth. You will not see increases in State revenue from tax cuts for about 48-36 months. In some instances however we do see decreases in revenue from tax increases. We all know there is a bell curve in taxation that is a certain point where taxes get so so high revenue decreases. If there were not the case, we would all be paying taxes of 100%. They tried a 90% tax on income above 250k in this nation and it failed miserably. Sweden tried it to with the same results. The fact is the economy is failing and it will for some years to come, increasing taxes during a depression will test that bell curve, the State will either collapse, or reform its spending. There are no other options at this point.
4:08 p.m.
Sep 19, '10
Same failed supply-side, Lafer curve nonsense. It doesn't work.
10:16 p.m.
Sep 18, '10
Thanks, I agree about rational discussion. there is too little of it.
Back to the issue. Actually I agree with Mitchell, Our problem isn't one that will be "solved" by tax policy. The biggest problem is consumer demand.
That said, we can give away huge chunks of money to business as Dudley is suggesting and attract business. But again the problem is we are removing huge amounts of revenue when we're in a hole. To answer your question regarding Kitzhaber's fiscal policy, the reason it's not being attacked here is 2 fold, this is a blue site AND Kitzhaber isn't suggesting removing 100s of millions from the state budget and counting on projected job increases to 'pay' for it. dudley is. Energy savings are measurable... there is a dollar cost associated with it, and there are specific known costs savings/ROI based on 'R' levels.
Additionally giving away large chunks of tax revenue to business has proven to be a mistake in many states with other taxpayers picking up the bills for those tax giveaways when the projections fail.
Look, we're in this mess in large part due to 'long term economic projections' I don't see us getting out with 'long term economic projections'.
We agree that there is some room for adjustments... but we disagree where the middle is. you may not like Kitzhaber, but if wildly optimistic projections are something you dislike, you'll need a better candidate than Dudley. The right had one in Allen Alley and they choose celebrity over competence.
3:36 p.m.
Sep 17, '10
you know, maybe it's just me... but I did a bit of research and noticed that you are quoting from just prior to the GOP lead economic meltdown. Why is that? because it proved to be as unsustainable as credit default swaps? The CBO NOW says that Bush tax cuts account for about 50% of the deficit.
I'm totally open to a discussion of this issue but I would expect a bit of intellectual honesty.
3:40 p.m.
Sep 17, '10
I was going to guess it was CBO as interpreted by the Heritage Foundation.
More Think-Tankery.
3:50 p.m.
Sep 17, '10
Study was presented in 01/2008. Although I would assume that 3 years prior and 3 years post event is statistically relevant enough for BO.
As far as intellectual honesty, I wasn't aware that partisan websites, both blue and red, where known for that.
5:41 a.m.
Sep 19, '10
the recession started in 08 ...2 years after the democrats took charge of congress.
11:38 a.m.
Sep 19, '10
The current recession was caused by the housing bubble burst and the financial crisis, not because a change in control of Congress took place a year before, when the Democrats became the majority in the 110th Congress.
There was however a recession in 2001 which was what was being discussed by Michael and Sonya.
2:27 p.m.
Sep 19, '10
There is much truth there, but the cause does go deeper though. Fractional Reserve Lending and fiat currency issued by the FED is the main cause. Banks can issue loans based on 10% of their reserves. This creates inflation and devalues our currency and artificially increases prices in every sector including housing. Under Clinton it was made easier to get home loans and many blame him, but ultimately if fiat currency and bad policy from both parties was not in play, we would not be in the trouble we are in now. The problem is lobbyist like the Fed because it can fund their projects, so the very people who have more influence over our representatives than we do, have interests contrary to all of ours. Very little of this is reported in the media because most lobbyists are connected to products or services that advertise via media outlets, thus a conflict of interest. You cannot print stories that drive away advertising dollars.
4:07 p.m.
Sep 19, '10
The United States has had a fiat currency since 1933. You can claim that the Fed artificially kept rates low (ala Greenspan's doctrine) which help facilitate the housing bubble, but Commodity Futures Modernization Act of 2000 and repeal of the Glass-Steagall Act of 1933 were the main contributors to the housing bubble, speculative bubble in the suddenly deregulated derivatives market for the finical crisis.
And yes, I blame Clinton in part signing both laissez-faire, GOP doctrinaire deregulatory moves (that far too many Democrats signed onto as well I might add).
4:25 p.m.
Sep 19, '10
Now you have your facts wrong. The banking reform was not laissez-faire and no one practices free market policies. They pass laws to help their friends under false pretenses, for example mandatory insurance is called health care reform. Laws to tap your phone and violate the rule of law is called "The Patriot Act". You are clearly confused. Yes recent repeals and legislation did have an impact. At least you are studied better in economics than in American history and human rights I will give you that, but you are still applying shallow generalizations that do not attack the core of the problem. You are just repeating more government school propaganda. The Glass Stengall Act was only necessary because of banking monster that was created in the Fed. Globally owned Central Banking with Fiat Currency in our nation goes back long before 1933 as well.
2:58 p.m.
Sep 17, '10
Even if it were true that tax cuts would result in increased production capacity (which it has been shown does not happen) it's still fundamentally a demand problem when the economy is in this kind of hole. This should be required reading: http://www.cbo.gov/ftpdocs/112xx/doc11255/Unemployment_Testimony.shtml
3:02 p.m.
Sep 17, '10
Congressional Budget Office Testimony on Policies for Increasing Economic Growth and Employment in the Short Term
5:08 p.m.
Sep 17, '10
Exactly. The problem is not capital. It is demand. More capital is currently sitting on the sidelines because demand is not there in the economy. Small Business tax credits, FICA holiday's, etc. are some legitimate tax cuts that would help the demand side somewhat (and indirectly). More direct spending is what is needed.
1:43 p.m.
Sep 17, '10
"Cut taxes and pray for jobs" ...
And your alternative is:
"Raise taxes and kill jobs"?
2:28 p.m.
Sep 17, '10
No. Do projects that need doing -- and accelerate the timeline to do them now. Especially projects that require upfront investment, but save money long-term -- like making all our schools energy-efficient.
4:06 p.m.
Sep 17, '10
please point to tax increases in either candidates plan.
5:08 p.m.
Sep 17, '10
So Clinton's tax increases killed jobs in the 90s?
5:55 a.m.
Sep 19, '10
No ...well sort of ...Clinton's tax increases didn't raise tax revenues Mitchell ...it lowered them.. in fact individual income tax revenues as a share of GDP were lower during the first four years of the Clinton tax increase, which include the effects of the 1990 tax increase, than under the last four years of the Reagan tax changes (FY 1986-89). Furthermore, according to a study published by the National Bureau for Economic Research,[2] the Clinton tax hike failed to collect over 40 percent of the projected revenue increases.
see lower taxes really do stimulate job growth ..clinton proved it
11:42 a.m.
Sep 19, '10
The data does not support your claims at all. Either in constant dollars or GDP.
Total Federal Revenue as a Percentage of Gross Domestic Product
1990 18.0 < drop
1991 17.8 < drop
1992 17.5 < drop
1993 17.5 < Clinton tax passed
1994 18.0
1995 18.4
1996 18.8
1997 19.2
1998 19.9
1999 19.8
2000 20.6 < tech bubble collapse
2001 19.5 < Bush tax cut passed
2002 17.6 < drop
2003 16.2 < drop
2004 16.1 < drop
Total Federal revenue in constant dollars (billions)
1991 1,473.0 < drop
1992 1,467.5 < drop, Bush "read my lips" tax increase
1993 1,511.5 < Clinton tax passed
1994 1,617.7
1995 1,691.4
1996 1,775.5
1997 1,889.9
1998 2,040.9
1999 2,136.4
2000 2,310.0 < tech bubble collapse
2001 2,215.3 < Bush tax cut passed
2002 2,028.6 < drop
2003 1,901.1 < drop
2004 1,949.5 < drop
Source: CBO historical data
12:45 a.m.
Sep 21, '10
Gee Robert, Mitchell kinda owns you.
In the future, you're going to have to provide the data to back up your claims.
Aren't you a doctor? I sure hope you use more evidence in your medical practice than in your economic discussions.
1:54 p.m.
Sep 17, '10
According to BLS historical data, Kitz created roughly 127,600 jobs as Governor. That equated to a job growth of 8.11% during his term. Great.
Except, during the same term, the USA created 15.7% more new jobs. Kitzhaber managed to grow job at 1/2 the rate of the rest of the country.
Raw numbers are meaningless unless you have perspective.
2:25 p.m.
Sep 17, '10
This might be a naive question, but since when is job growth the sole responsibility of one man? You have a small point, but it ignores two very large factors. 1) we were not a technology state and how Kitz was supposed to remedy this, I haven't a clue and 2) the timber industry went automated during the time you mention.
Job growth relative to the national average has since shrunk substantially because we are probably making up for a lot from #1 and #2.
2:30 p.m.
Sep 17, '10
And Oregon timber harvests dropped by 90% over the course of the 1990s - as a result of federal policy.
Much of that was good policy, but it still had an impact on jobs in Oregon.
5:15 p.m.
Sep 18, '10
Exactly. The employment record across the state was and continues to be very uneven. Throughout Kitzhaber's terms in office as Gov. the Portland metro counties had a consistent lower unemployment rate than the rest of the country, and massive economic and job growth until the tech bubble burst. It was the double-whammy of the dot.com bubble busting and the 9/11 recession that shot the urban areas of the state's employment rats up to what they are in the rest of the state (though they have coming down to pre .com bust rates in urban counties).
As Christian Kaylor noted last year, there are two ingredients to a rising unemployment rate: job loss and a growing population. For Oregon, with an above average population growth rate and an economy that's been especially hard hit (tech bubble bursting), a rapidly rising unemployment rate is the natural result. In contrast, several states saw very little population growth in 2008 (e.g., Ohio, New Jersey, and Pennsylvania) or even population loss (e.g., Michigan and Rhode Island).
While unemployed job seekers flee states that experienced significant job loss, Oregon has seen continued strong population growth. In 2008, as the state lost 56,000 jobs, the labor force grew by almost 45,000. That's the fastest pace for labor force growth since 1996, when Oregon's economy was booming.
Strong population growth, in good and bad economic times, has been a hallmark of Oregon for decades. Many are surprised that even as Oregon sheds jobs people would choose to relocate here. The reasons are clear: good climate, high quality of life and low cost of living compared to some other desirable places. Perhaps most importantly, Oregon borders California - the state with the largest population in the U.S. Thirty eight million people live in California; that's 10 times Oregon's population. When California's economy declines, people leave in search of jobs elsewhere. In 2008, California lost over 250,000 jobs. If one-tenth of those quarter million newly unemployed moved to Oregon to look for work, our unemployment rate would increase by more than a full percentage point.
3:08 p.m.
Sep 17, '10
No one person "creates jobs" in this context. It should always be noted, also, that the Republicans had a lock on the Legislature during the entirety of John Kitzhaber's two terms as Governor.
3:20 p.m.
Sep 17, '10
"Liked" for stating the one FACT most often forgotten in this state.
Drives me cuckoo-bonkers!
3:02 p.m.
Sep 17, '10
"(Stockman was Reagan's first budget director, who used his asterisk to claim that tax cuts would cause actually cause revenues to rise.)"
cause actually cause?
6:01 a.m.
Sep 19, '10
and shazaam history and the numbers show conclusively that both things happened ...really happened would you like me to post the links so everyone could see for themselves ...yes reall see for themselves
11:43 a.m.
Sep 19, '10
You are wrong. The data shows that your claims are not accurate at all, and in fact the opposite of what you claim.
3:33 p.m.
Sep 17, '10
Ah, yes... "trickle down economics". It's what George H W Bush called "voodoo economics" when he was running against Ronnie Reagan. And he was absolutely right. It ushered in the massive deficits of the next 30 years after 1980. Tax breaks for wealthy, borrow and spend for government.
Except here in Oregon you can't borrow. You have to pass an honest budget with honest projections for revenue based on what the state economic forecaster gives, not on magical thinking. So this alleged economic plan is a total fraud.
3:36 p.m.
Sep 17, '10
So the Dudster wants to log off state forest lands. Except there's no market for lumber with the housing and building recession. So he wants to do a scorched earth clear cut of our state's heritage forest lands at bargain basement prices. That's great policy????
3:38 p.m.
Sep 17, '10
"So he wants to do a scorched earth clear cut of our state's heritage forest lands at bargain basement prices"
link please
3:49 p.m.
Sep 17, '10
Look at his plan, increased timber cutting on state lands is part of the plan.
3:52 p.m.
Sep 17, '10
ah, embellishment
3:58 p.m.
Sep 17, '10
There's already plenty of logging of state lands. More than many people want to see. And most of it is clear cut. So when Dudley wants to accommodate his timber company contributors with more timber than they're already taking, it has to amount to scorched earth, at a time when timber prices are severely depressed. That's not embellishment, that's called the spoils system of politics.
5:09 p.m.
Sep 17, '10
How is that embellishment?
11:20 p.m.
Sep 17, '10
Michael,
Seneca, Stimson and to a smaller extent Frere are the highest donors to his campaign. Kitz has gotten some money from timber too, but the amount is laughably smaller than Duds.
Follow the money.
And since Dudley controls his message so closely by avoiding debates and pressing media questions, we actually do not even now what his environmental plan is. I've found some things on my own from before he won the primary. But we really don't know how he feels about the latest EPA restrictions on that new biomass plant in Eugene which runs on TREES.
There's so much we do not know and one debate is just a disgusting insult to the voters.
4:16 p.m.
Sep 17, '10
given that Dudley has avoided debate to the point of using his family to lie his way out of one... we actually know very little about Dudley other than he's a diabetic that likes to throw candy at parades.
So given that, and that he basically has no record of accomplishment other than a 30% Freethrow average, we have to dissect what he actually says and who his donors are... let's just look at one:
Dudley's largest donor aside from Newcorp/RGA is Austin Industries. Austin is a Oil and gas company. Filigree Advisors, Dud's company, specializes in Oil and Gas investments. In a KGW interview at the height of the BP oil spill Dud said he was "open to off-shore drilling". Therefore one could conclude that Dudley supports Oregon off-shore drilling.
4:18 p.m.
Sep 17, '10
oh yeah, I should point out that estimates for job LOSSES due to BP oil spill are expected to exceed 1M jobs, and actual cost over $100B.
3:52 p.m.
Sep 17, '10
http://www.oregonlive.com/politics/index.ssf/2010/09/chris_dudley_presents_20-point.html
"Dudley said he'd also promote more use of the state's natural resources by allowing more logging on state lands,"
11:22 p.m.
Sep 17, '10
"Ah, embellishment." With facts.
1:19 p.m.
Sep 18, '10
I searched that article and didn't find the words "scorched earth" "clear cut" "heritage" "bargain basement" anywhere. :-)
5:52 p.m.
Sep 17, '10
It's time to listen to one of the most successful liberals, how also was a road scholar and economist.
Many quotes
"It is a paradoxical...the soundest way to raise the revenues in the long run is to cut the rates now"
– John F. Kennedy, Nov. 20, 1962,
"Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government."
– John F. Kennedy, Jan. 17, 1963,
"In today's economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues."
– John F. Kennedy, Jan. 21, 1963,
"It is no contradiction – the most important single thing we can do to stimulate investment in today's economy is to raise consumption by major reduction of individual income tax rates."
– John F. Kennedy, Jan. 21, 1963,
"A tax cut means higher family income and higher business profits and a balanced federal budget."
– John F. Kennedy, Sept. 18, 1963,
"Our present tax system ... exerts too heavy a drag on growth ... It reduces the financial incentives for personal effort, investment, and risk-taking ... The present tax load ... distorts economic judgments and channels an undue amount of energy into efforts to avoid tax liabilities."
– John F. Kennedy, Nov. 20, 1962, press conference
"taxes ... inhibit the mobility and formation of capital, add complexities and inequities which undermine the morale of the taxpayer, and make tax avoidance rather than market factors a prime consideration in too many economic decisions."
– John F. Kennedy, Jan. 23, 1963,
"The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive."
– John F. Kennedy, Jan. 24, 1963,
"Expansion and modernization of the nation's productive plant is essential to accelerate economic growth and to improve the international competitive position of American industry ... An early stimulus to business investment will promote recovery and increase employment."
– John F. Kennedy, Feb. 2, 1961,
"We must start now to provide additional stimulus to the modernization of American industrial plants ... I shall propose to the Congress a new tax incentive for businesses to expand their normal investment in plant and equipment."
– John F. Kennedy, Feb. 13, 1961,
It appears Dudley plan is close to John F Kennedy's successful plan. And Kitzhaber has the same status que failed crony capitalism bureaucratic union run system.
6:02 p.m.
Sep 17, '10
Bwhahhahahaha.
So now Dudley is JFK?!?
The top marginal rate was 91% when those quotes were made by JFK. So please tell us how they are at all relevant to the 21st century in the here and now when the tax rate is 35% (lower than it was during Reagan)...?
BTW, jobs and the economy went up dramatically after Clinton raised taxes in 1993 from the rate they were under Reagan/Bush I.
Furthermore, the Obama administration is pushing to make permeant cuts to the rates on the first $250,00k of income.
So do you support the Obama tax-cuts?
6:41 p.m.
Sep 17, '10
Hi Mitchell,
It's basic college 101 economics. It has worked many time for years, it increase the states coffers.
I'm not saying Dudley is JFK, I say we need to do what has really works, liberal or conseritive. Lower taxes use to be liberal, and JHK went large with liberal issues and a strong lower tax economy at the same time!!!!
8:05 p.m.
Sep 17, '10
I'd also again point out the obvious... the current capital gains tax rate is AT LEAST 25% lower than it was under JFK.
8:25 p.m.
Sep 17, '10
And our national deficit is exponentially higher, thanks to "voodoo economics" also known as "trickle down" or "supply side". This tripe has been disproven time and again, and the Bush tax cuts are the latest example.
2:54 p.m.
Sep 19, '10
I would say massive spending would be the largest problem, not revenue. Both parties spend like alcoholics in liquor stores.
4:16 p.m.
Sep 19, '10
Except actual history has proven your claims wrong. We not only got out of the Great Depression via the largest public works project in human history, aka WWII (which BTW require almost 33% of GDP in deficit spending) but was only accomplished through abandonment of the gold standard. On the flip side of the equation (taxation) and on a much smaller scale, targeted tax increases (such as the increase in the top marginal tax rates) contributed in no small part to getting the economy back on track in the 90s (and kept a handle on the deficit as well).
9:59 p.m.
Sep 17, '10
No it hasn't. Dudley's "plan" is Lafer curve failed voodoo economics recycled.
11:42 a.m.
Sep 18, '10
"It's basic college 101 economics. It has worked many time for years, it increase the states coffers."
Randy, you sound pretty sure of that. Please provide a source for that claim.
Theoretical claims are nice, but facts are even better. You seem pretty sure they exist. Please share with the class!
6:10 a.m.
Sep 19, '10
first off they aren't the Obama tax cuts ...thats a lie no taxes will be cut... secondly as I explained above Mitchell Clinton's tax increases didn't raise tax revenues ...it lowered them.. in fact individual income tax revenues as a share of GDP were lower during the first four years of the Clinton tax increase, which include the effects of the 1990 tax increase, than under the last four years of the Reagan tax changes (FY 1986-89). Furthermore, according to a study published by the National Bureau for Economic Research,[2] the Clinton tax hike failed to collect over 40 percent of the projected revenue increases.
see lower taxes really do stimulate job growth ..clinton proved it
11:48 a.m.
Sep 19, '10
The administration is pushing to have Congress pass a permanent cut on the first $250,000 of income to take effect for the coming year.
The rest of your claim has already been debunked with the actual numbers up-thread. Repeatedly cutting and pasting the same factually untrue thing does not make it true.
12:47 a.m.
Sep 21, '10
Sure, they're the Obama tax cuts. After all, we're about to be hit with tax increases passed into law by George W. Bush and the Republican Congress.
7:58 p.m.
Sep 17, '10
wow randy, without context one would think Dudley was JFK... with context one would actually have looked at tax rates in 1960 and had a bit of perspective to put this in. And called this comparision total bullsh!t.
And I'd point out that with a tax rate for the highest earners hovering around 70-80% JFK had an unemployment rate of 5.5%. go figure.
Just for fun would you like to discuss Reagan tripling the national debt? HWB doubling it? W doubling it again?
I'm assuming you know what the laffer curve is, where do you think we are on it?
8:47 p.m.
Sep 17, '10
for a bit of perspective.
http://news.google.com/newspapers?id=g-sQAAAAIBAJ&sjid=84sDAAAAIBAJ&pg=6209,1538033&dq=president+kennedy+tax+cuts&hl=en
11:39 a.m.
Sep 18, '10
If by "road scholar", you meant Rhodes Scholar - then, no, John Kennedy was not.
6:07 a.m.
Sep 19, '10
Yes the Kennedy tax cuts also generated higher tax revenues ...yes actually generated higher tax revenues ...just like Reagans did and just like the mellon tax cuts of the 20's did ..yes really did
12:02 p.m.
Sep 19, '10
Actually that's not true either. Again the actual data shows that your claim is false.
Total Federal Revenue as a Percentage of Gross Domestic Product
1960 17.8
1961 17.8
1962 17.6
1963 17.8
1964 17.6 < tax cut takes effect
1965 17.0 < drop
Source: CBO historical data
9:13 a.m.
Sep 19, '10
a) apples and oranges: look at the differences in tax rates between when Kennedy came into office and today; and
b) just because JFK said something neither means it is true, nor that it must be agreed with by Democrats.
12:47 a.m.
Sep 18, '10
Presidents and Governors take too much credit and take too much blame for the economy which is largely out of their control.
We had a few factors in the 1990s:
Boom of personal computer use and the Internet economy.
Baby Boomers in their prime earning years.
World-wide euphoria and economic growth due to the end of the Cold War.
Start of the real estate bubble in 1995.
Currently, we have none of those factors and no bubble. Here is what is dragging down our economy:
Collapse of the real estate bubble.
Limit on individual economic activity due to Baby Boomers making careers off of accreditation, business licensing, and user fees.
Ongoing retirement of the largest segment of the US population.
NAFTA and all other free trade agreements under Clinton and Bush 2 outsourcing living wage, solid tax base jobs for non-college attending high school students to make a respectable living from and for the Public Sector to live off of.
The Executive branch can and should propose policies to loosen up limits on individual economic activity. What I can envision is less accreditation, lower licensing fees, and getting rid of user fees on public lands.
If we keep on the same path with intermittent Federal stimulus, we will end up like Japan in 2020 where over a fifth of our population is retired and the current, entrenched expanse of government into the private sector dampens individual entrepreneurship to the extent where workers will stay in their dead end jobs even though their ideas and plans could create a Fortune 500 company.
11:51 a.m.
Sep 18, '10
Ryan, your basic statement is right -- we assign too much credit and blame to politicians for the economic cycle.
However, policy CAN make a difference.
And one critical policy enacted in 1993 - without a single Republican vote - made the 1990s economic boom possible.
By raising taxes in 1993, and holding the line on spending, Bill Clinton began to shrink the federal deficit - eventually shifting it to a surplus.
When that happened, the amount of new federal debt being issued began to shrink - and once we hit surplus, there was no new debt and old debt was starting to get paid off.
Why does that matter? Because suddenly there were fewer places to put capital. Capital had to find other places to get invested -- and much of headed to Silicon Valley, where a bunch of young entrepreneurs were messing around with the internet.
This was not an accident, btw. It was explicitly part of the plan. Reduce the deficit, force capital to find new places to invest, create economic growth.
(I recall, as a college sophomore, participating in a student debate for Clinton and Bush - and that was part of the economic policy pitch.)
2:56 a.m.
Sep 18, '10
Man, have any of your run a company, been involved in GROWING a business.
The current system is failing, look around...Government Taxation and over regulation is the biggest burden on my being an entrepreneur and paying my employees a higher living wage.
PS Many countries have no capital gains taxes and several States have no income tax, the freer the market the less government the better the system is, the higher the health and economic standard of the poor.(With Ted K and Kizh they want more Crony capitalism it didn't work)
Statistically, the freer the people are the higher the social standards, it's just a fact.
Why due liberals always hurt the poor, the ones you claim they want to help?
11:00 a.m.
Sep 18, '10
Actually more than a few around here have.
The majority of small business owners disagree with your claim. In fact, the largest growing problem small business owners (and large I might add) all point to is the huge drop in demand as the single biggest problem they face.
As Krugman and numerous others point out, it's the aggregate demand, stupid. Some targeted cuts, like Obama's proposed cut on the first $250,000 of income, along with the Small Business Jobs and Credit bill which finally cleared the Senate this past week, will help. But the most significant problems facing all small business owners are lack of sales and uncertainty.
Businesses are hoarding more cash (almost double) to assets then they have in the past 40 years because the aggregate demand is in the toilet and they are worried about where their sales are.
Right now the economy is in vapor lock because the demand side has fallen off a cliff due to rising unemployment, combined with the the fact that between 2001 and 2009, the incomes of middle-class families fell by almost 5 percent. The housing bubble is what papered over a lot of that with spending making up for it by using homes as ATMs in a re-fi frenzy during the housing bubble.
1:27 p.m.
Sep 18, '10
Based on what i have read, we have a classic catch-22 at play. Businesses won't hire until demand picks up and people won't buy until businesses start to hire.
Data show that large companies have basically returned to profit level pre-crash. Based on Q2 earnings statements, the F500 were at 97% of pre crash earnings.
What most small businesses say is hurting them is a lack of capital. So many businesses want to grow and expand, but cannot secure the funds to do so.
4:53 p.m.
Sep 18, '10
I agree with what you said in your first two paragraphs, but as you can see from the data in the Krugman article (the first link above) capital is not the primary problem (it is demand).
That said, the Obama administration's recently passed small business bill which should be signed shortly, the Small Business Jobs and Credit bill will target SMB capital concerns you mention in your 3rd paragraph, which, while worth merit is not the major driver of the economic vapor lock we have.
8:06 p.m.
Sep 18, '10
An overwhelming majority of business owners say they have plans to expand their companies, but relatively few have the capital to do it, according to a new study.
article
10:38 p.m.
Sep 18, '10
Gee, a survey by the Private Markets Capital Project at Pepperdine that pushes data that says business want capital. Knock me over. I'll stick with the data from the National Federation of Independent Business and their survey and data thank you.
That said give the Small Business Jobs and Credit bill that just cleared the Senate and will soon be on the way to the presidents desk.
10:51 p.m.
Sep 18, '10
Funny how anything that goes against your pov is wrong and anything that support your view is right.
Btw, the NFIB, of which I am a member, has a very hard right perspective on issues. They are very anti-Obama healthcare, for abolishing "death taxes" and for cutting every tax known to man. (I am a member for the discounts, not their political views)
But hey, as long as they tell you what you want to hear...
11:36 p.m.
Sep 18, '10
And yet their rightward bias still shows their data and survey says that demand, not taxes or regulation are the main driver of small business concern.
6:12 a.m.
Sep 19, '10
it stands to reason that if people were able to keep more of their money to spend it might impact the demand ...don't you think?
12:08 p.m.
Sep 19, '10
We were discussing corporate taxes vis-é-vis demand.
That said, I am all for Obama's proposed cut on the first $250,000 of income to take effect for the coming year. Though that is not enough. We need direct spending on jobs programs as well.
Too bad Boehner and McConnell are holding it hostage in the "just say no" jihad on anything the administration or the Democrats in Congress try and do to create jobs.
So are you going to call your Congressman to tell them to push the permanent Obama tax cuts on the first $250,000 of income?
12:34 p.m.
Sep 19, '10
Actually, it was access to capital vs. demand
12:55 p.m.
Sep 19, '10
Doh. Meant to type capital gains taxes not corporate taxes, and Robert's comment derailed it. Mea culpa.
4:45 p.m.
Sep 18, '10
I consult business in Oregon, Krugman has a job in an Ivory tower, in NY, he might never been in Oregon.
Catch a clue, many companies, small business have real anger towards government, look at the angst at the tea party, it centers in Oregon is small business, trust me, you would be shocked at what some business really think.
4:58 p.m.
Sep 18, '10
If you bothered to actually read the article, the data comes from small business data which is from the SMB (small-medium business) segment surveys, about what their concerns are.
That you point to ignorant "tea party" rage as indicative of small businesses or the voice of anything other than low-info ignorance and an feeble attempt by the GOP to re-brand itself, exposes your comment for the wholly non-serious argument that it is.
1:23 p.m.
Sep 18, '10
Can you provide an example of one regulation in Oregon that has negatively impacted your business.
2:00 p.m.
Sep 18, '10
I don't want to get into specific but zoning in Washington County, they told me their going to red line an issue, that means more engineering, their reason was they red line 100% of all projects. Later after asking why we were Redlined, they claimed the date was wrong, the date was in the year I submitted the plans.
Permitting in Portland, they found some some obtruse 14 year issues, that we fought about for three months, before they found they were wrong, with the consultants and fees, they mandated, to solve something the city got wrong from the start, to me it made the city Kool-Aid patrol on little kids look good.
Since I'm on a State wide industry board. that's almost all we do is fight,(proffesional) and I'm might say stupid new proposed regulations it's albout raising more fees.
To Answer Micheal, your right from most companies it's demand, I out hustle most companies, and we have decendt demad, but still about 1/3 of my time is dealing with regulations instead of creating more demand. It takes away time to help my GREAT clients.
Micheal So some Paul, guy in New York that writes articles in a newspaper is going to know more about my business regulatory issues, fees, costs, and nightmare wainging on phones lines for nothing, than I do on the ground in Oregon, SURE!
5:03 p.m.
Sep 18, '10
Yeah, a Nobel-prize winning economist is just some guy writing a newspaper. The main driver int he economic vapor lock we are in is not regulatory or taxation overburdening of business. It simply isn't.
I don't discount the local zoning or regulatory issues you face, but that is not what it knee-capping the economy.
6:14 a.m.
Sep 19, '10
obama won a nobel prize too Mitchell which cheapened that award into being meaningless in my book besides krugman is NOT right (again)
12:10 p.m.
Sep 19, '10
Of course Obama getting a Nobel peace prize cheapens it in your view. Can't be Nobel Lauretting while black now can we?
12:49 a.m.
Sep 21, '10
FWIW, Obama won the Peace Prize - which is a very political prize, and often award for reasons of aspiration, not achievement.
Krugman won the Economics Prize, which is awarded for serious achievement in a tough, technical field.
7:19 p.m.
Sep 18, '10
Just to clarify, those are city and county issues. I agree wholeheartedly that the metro area can be a disaster at times for business.
1:38 p.m.
Sep 19, '10
I've lived in Washington County for 15 years. Not only are the zoning laws exceptionally business friendly, they go out of their way to make it super-easy and cheap for developers to build. Washington County is eager and ready to give away anything and everything here to any corporation that cares to show up. They're the proverbial tart who gives it up on the first date for a cheap meal and a few drinks.
If you had something "red-lined", in his county then frankly it had to be egregious.
10:30 p.m.
Sep 18, '10
"The freer the market the less government the better the system"?
Nice talking point. Nevada is ranked 4th best business climate in the country, low taxes, low cap gains, and go figure 14.3% unemployment.
Given that you won't tell us what business you are in it's hard to know if you are over regulated. I assume it's some sort of construction. Is that correct? because if it is the biggest barrier to paying higher wages is too many people and not enough jobs, in other words, demand.
I'm in a service industry, We a very specialized graphic design company and have clients all over the country as a result we are not paying Oregon wages, which are notoriously low by national standards (we have no Northwest clients). Dudley feels that wages are barrier to business... (see the $90k the restaurant association has given him hoping to cut wait staff min wage).
here, take this simple quiz, come back when you're done...
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/09/12/INH31F68GB.DTL
and tell me again how liberals are your enemy.
10:43 p.m.
Sep 18, '10
btw: I'd simply add that you are wrong on Oregon taxes as well, out of 50 states oregon ranks 30th on amount of corp tax $'s collected per captia.
http://www.taxfoundation.org/taxdata/show/281.html
We rank 14th nationally for best business climate:
http://www.taxfoundation.org/taxdata/show/22661.html
We rank 26th for total tax burden:
one note, under last year GOP gov Atiyeh we ranked 3rd highest tax burden.
http://www.taxfoundation.org/taxdata/show/476.html
Until you start supporting your claims with actual facts... it appears you are simply spewing meaningless talking points
8:25 a.m.
Sep 24, '10
Why not move to Somalia? They have no regulation, no tax collection and the market is free as can be. Survival of the fittest, right?
10:06 a.m.
Sep 19, '10
I have to say I appreciate this discussion as it points out the real policy differences between Democrats and Republicans. Republicans want a low wage economy and still subscribe to trickle down economics, even though the last 30 years prove those policies don't work. The biggest uptick in the economy and the biggest fiscal correction happened after Bill Clinton's tax increase. So in the past decade we have gone from projected budget surpluses to terrible deficits, thanks to the Bush tax cuts. The Republicans try to press the narrative that we are at record taxes when in reality we are at the lowest taxes since the early 50s, and still they want more tax breaks for the wealthiest few.
And I find myself agreeing with the analysis of Mr. Pingree that consumers are waiting for businesses to hire and businesses are waiting -despite their profits- for consumers to spend.
7:22 p.m.
Sep 19, '10
When it comes to a business deciding whether to grow or not, capital is definitely an important factor. You can't grow without money.
Demand, however, trumps that. Business are not going to grow unless there is demand for their product. If you have demand, there are numerous ways to find the capital to fund growth.
The bigger issue, however, is confidence in the future. If you are uncertain of where things are going it doesn't really matter if you currently have high demand for your goods/services. It doesn't matter if you have ready access to capital. Confidence in the future is the number one issue. And the actions of the federal government are not instilling very many people with confidence. Without confidence in the future we will continue to stagnate.